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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For June 21, 2000
AERCO LIMITED
22 Grenville Street
St. Helier
Jersey JE4 8PX
Channel Islands
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F _
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _ No X
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AerCo Limited intends to commence a securitization of an additional 30
aircraft to be acquired from AerFi Group plc. Simultaneously with the
securitization, AerCo also intends to refinance its currently outstanding
subclass A-1 notes.
In connection with the securitization and refinancing, AerCo plans to issue
four subclasses of notes (the "New Notes"). The New Notes will be offered to
qualified institutional buyers in the United States under Rule 144A and outside
the United States under Regulation S. Under the indenture under which AerCo's
outstanding notes issued on July 15, 1998 (the "1998 Notes") were issued (the
"Indenture"), AerCo may only issue New Notes if it receives confirmation from
the rating agencies that the issuance of New Notes will not result in the
lowering or withdrawal by them of their current ratings of any subclass of 1998
Notes. This report has been prepared solely for information purposes and is not
an offer to buy or sell, or a solicitation of an offer to buy or sell, any
security or instrument or to participate in any trading strategy.
The information contained in Exhibit 1 to this report reflects only a
preliminary structure for the New Notes and is provided to noteholders solely as
an indication of AerCo's current intentions. Noteholders should note that it is
possible that AerCo may not consummate the securitization or refinancing and
that if it does, the New Notes and the revised assumptions may differ
significantly from what AerCo currently intends. If AerCo revises the relevant
information significantly, it intends to issue another report containing the
revised information. In any event, upon consummation of the securitization and
refinancing, AerCo intends to issue a report containing the relevant information
in definitive form.
A substantial number of the additional aircraft will not be delivered by
AerFi to AerCo until after the closing date. AerCo's obligation to purchase any
additional aircraft will terminate on July 16, 2001 if the aircraft cannot be
delivered by that date or under certain other circumstances. Exhibit 1 to this
report describes the purchase agreement AerCo intends to enter into with AerFi
and other arrangements relating to the acquisition of the additional aircraft.
AerCo's enlarged portfolio, including the 30 additional aircraft and related
leases, will support its obligations under both the 1998 Notes and the New
Notes. In connection with the securitization, AerCo has obtained new appraisals
as of April 30, 2000 for each aircraft in the enlarged portfolio. With immediate
effect AerCo will use the relevant new appraisals to calculate the "Adjusted
Base Value" of each of the 33 aircraft that it currently owns for all purposes
under the Indenture, regardless of whether it consummates the securitization.
Attached as Exhibit 2 is a description of AerCo's enlarged portfolio, assuming
that it acquires the 30 additional aircraft and containing the new appraisals.
In connection with the securitization, AerFi will replace Babcock & Brown
as servicer of the aircraft and debis Airfinance B.V. will act as standby
servicer, cash manager and administrative agent. Exhibit 7 provides information
regarding these arrangements. Exhibits 8 and 9 provide current financial
information for AerCo and its subsidiaries and the 30 additional aircraft AerCo
intends to acquire. In connection with the securitization and refinancing, AerCo
has revised its assumptions about its performance in future years. Attached as
Exhibit 3 are the new assumptions, based upon the enlarged AerCo portfolio.
Based on the new assumptions, the tables showing possible future revenue
scenarios or stresses that AerCo previously disclosed for the 1998 Notes would
also change. Included in Exhibit 1 are new stress tables for the 1998 Notes
(other than the subclass A-1 notes, which are assumed to be refinanced). Also
under the new assumptions and with the enlarged portfolio, AerCo's assumed
monthly lease rentals and assumed portfolio values would change. These are
attached as Exhibits 4 and 5. The new assumptions and stress tables do not
affect the payment terms of the 1998 Notes, but merely represent a revised
illustration of the effects of factors that are likely to significantly affect
AerCo's performance in future years.
Upon consummation of the securitization and refinancing, in accordance with
Section 3.11 of the Indenture, each of the Class Percentages (as defined in the
Indenture) for MSAF's class A notes, class B and class C notes shall be adjusted
to take into account the acquisition of the 30 additional aircraft, as
determined by AerCo's directors.
In accordance with Section 3.11 of the Indenture, no Pool Factor or
Extended Pool Factor (as defined in the Indenture) for any subclass of the 1998
Notes may be adjusted.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
AERCO LIMITED
Date: June 21, 2000
By: /s/ ADRIAN ROBINSON
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Director
EXHIBIT INDEX
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Exhibit 1..................................... Summary of the New Notes
Exhibit 2..................................... AerCo's Portfolio
Exhibit 3..................................... AerCo's Performance Assumptions
Exhibit 4..................................... Monthly Lease Rentals
Exhibit 5..................................... Assumed Portfolio Values
Exhibit 6..................................... Transaction Summary and Certain Risks
Exhibit 7..................................... Servicing Arrangements
Exhibit 8..................................... Management's Discussion and Analysis of Financial
Condition, and Results of Operations
Exhibit 9..................................... Financial Statements
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